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1、DSE7100ManagingServiceOperationsDiscussionofShouldiceHospitalLimitedCaseAssignment#2:QuestionsforShouldiceHospitalLimitedHowSuccessfulistheShouldiceHospital?Howdoyouaccountforthesuccessofthehospital?WhatisthestrategicserviceconceptofShoudiceHospital?
2、Howaretheelementsintheservicesystemsdesignedandmanagedtosupportthestrategicserviceconcept?AsDr.Shouldice,whatactions,ifany,wouldyoutaketoexpandthehospital’scapacity?Howwouldyouimplementchangesyoupropose?PatentsdonotfeelthatthatarestayinginhospitalPat
3、ientsaretakingavocationThisisaclubFocusedHowisShoudicedifferentfromotherHospitals?HowSuccessfulisShouldiceHospital?140,000highlysatisfied“Alumni”(pastpatients)1,200backlogofscheduledoperationsDemandappearstoexpandwithsupplySuperiorqualityShouldiceMet
4、hodofHerniaoperationimitatedbycompetitorLowrecurrencerate,0.80%vs10%HighdegreeofemployeesatisfactionCostComparison:Shouldicesvs.OtherHospitalsShouldiceOthersCostsoftypicaloperations$954(p9)$2000-4000Transportation$200-600$0TimeLostfromworkinHospital4
5、days5daysTimelostfromworkwhilerecovering5days10daysValueoftimelost(rangingfrom$50to500perday)$450-4500$750-7500TotalbeforeAllowanceforrecurrence$1604-6054$2750-11500ProbabilityofRecurrence0.80%10.00%ExpectedCostofRecurrence$13-48$275-1150Totalcosttop
6、atient,employeeandinsurer$1,617-6,102$3,025-12,650HowAbouttheProfitabilityofShouldiceHospital?Hospital:Revenues(4daysX$111/dayx6,850patients/year)3,041,400Cost2,800,000Profit:241,400 Clinic: Revenues(($450+60+75X0.20)X6,850)3,596,250Cost2,000,000Prof
7、it1,596,250TotalProfit1,837,650ReturnonequityTotalDepreciatedAssets:$5milReturnonAsset:1,837,650/5,000,000=37%WhatisthereturnonAssetiftheyexpandthecapacityby50%atthecostof$2mil?1,837,650x1.50/7,000,000=40%“TheDreamWorld”Shoudiceisoffering:highquality
8、serviceatlowpriceShodiceishavingHighlysatisfiedcustomersHappyEmployeesShouldiceisalsomakinghighprofitHowisallofthisachieved?Whatarethemajorreasonsforthesuccess?Maximizingthedifferencebetweenperceivedqualityandvaluetothepatientononehandandthecostofsup
